The drama triggered when the Murakami fund, managed by maverick investor Mr. Yoshiaki Murakami, purchased a large chunk of Hanshin Electric Railway Co. shares came to an end last week as shareholders of both Hanshin and Hankyu Holdings Inc. voted for a merger. It is the first merger of major railway companies in postwar Japan and will create the third-largest non-JR (Japan Railway) railway operator in terms of consolidated annual sales.
The management of both companies needs to chart a postmerger strategy as soon as possible that will solidify the financial foundation of the new firm as well as enhance the convenience and safety of users. A new joint holding company, Hankyu Hanshin Holdings, will be created on Oct. 1, and Hanshin will become a wholly owned subsidiary of Hankyu.
The drama started in late September 2005 when the Murakami fund emerged as a large Hanshin shareholder. The fund increased its stake in Hanshin, well known as the owner of a popular pro-baseball team, the Hanshin Tigers, to about 47 percent. Through a public tender offer, though, Hankyu acquired a 64 percent stake in Hanshin, including the stake held by the Murakami fund, whose head was arrested in early June on suspicion of insider trading.
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